Amidst the uncertainty of how to treat the e-books is the fear of cannibalization of hardcover sales. “If you as a consumer can look at a book and say: ‘I have two products; one is $27.95, and the other is $9.95. Which should I buy?’,” according to Dominique Raccah, chief executive of Sourcebooks.
I’ve been delving into the nuances of book distribution and marketing since I wrote a book about the subject in 1978. And, typical for anything about the book publishing industry, notably missing form this article, and most such discussions, is an examination of the economics and the retail marketplace.
First, for bestsellers, at least—which is what this article focuses on—the real retail price of a hardcover fiction is not about $25 or $30 but the 40% discount price charged by most major outlets, including Amazon and B&N. Thus, the real price difference for most consumers is roughly $15 to $18 for the hard copy vs. $10 for the e-book.
Second, the article does have one data point—that Amazon is paying the same price for the e-book as the hardcover. Assume that is 50% off list. So that from the publisher’s position, it gets the same revenue no matter which format. And it saves the manufacturing cost. And it gets no returns! What’s not to like?
Third, this discussion would be enhanced by knowing how author royalties are being handled these days. If the author is earning a royalty based on a percentage of the revenue the publisher receives, then it is at worst a wash whether it is a percentage of the physical book or the price the e-book distributors pay. And to the extent that books are price elastic, the $10 e-book price point could potentially increase sales, thus resulting in greater revenue.
COMMENTS
1. Nate Wilson on November 17, 2009 4:00 PM writes...
Great article! This seems like a no-brainer to me and if major publishers don't make these rather simple changes in their business models, they absolutely deserve to lose their business. My opinion is that there will always be demand for the nostalgia of paper print, albeit a smaller niche as the future progresses. For now, I am not impressed enough with the limited capabilities of handheld e-book readers to buy one and commit to digital books. My laptop is an inconvenient way to read e-books (relative to a light-weight, ultra-portable paper book) because of it's awkwardness, battery limitations and cumbersome size. The only limitation keeping my iPhone from being the ideal e-book reader (within the constraints of currently available technology) is its too-small screen size. Apple designers take note.
" .Hello,
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'Yes', the Cart can be used for subscriptions.
Majority of our merchants' buyers are actually international. Sadly, not a lot of local users are accustomed to buying things online.
It does not include a website (although we also offer that service separately). You can get any 3rd party to do the website and we will just integrate with them.
regards
hazz.hazz"
The real difference SHOULD be that e-books have a huge advantage. The printing costs, binding costs, shipping costs, etc., have all disappeared.
Check out Baen Books (Baen.com). I've been buying books for years, e-books, at a great price. For my favorite authors I also get the dead tree edition.
In the long run, this is a great way to get books. If I see one I like, I can order it and start reading in a couple of minutes.
This is so successful that Baen actually has about 50 FREE books online. Why? Great advertising for their different authors and series.
This is the wave of the future. It's ecologically better (no waste of paper). It's quick. It's a far better medium for textbooks. A school district could buy a years license for X number of downloads. And books could be updated each year. All for far less money.
This is the new tech. In fifty years, this is the only way it will be done. Since we CAN do it now, maybe we should.
Check out Baen Books (Baen.com). I've been buying books for years, e-books, at a great price. For my favorite authors I also get the dead tree edition.
In the long run, this is a great way to get books. If I see one I like, I can order it and start reading in a couple of minutes.
This is so successful that Baen actually has about 50 FREE books online. Why? Great advertising for their different authors and series.
This is the wave of the future. It's ecologically better (no waste of paper). It's quick. It's a far better medium for textbooks. A school district could buy a years license for X number of downloads. And books could be updated each year. All for far less money.
This is the new tech. In fifty years, this is the only way it will be done. Since we CAN do it now, maybe we should.
I just popped over to Amazon, and there the typical Kindle book is maybe a dollar or two cheaper than the physical copy on a typical price between $10 and $20. That isn't much in terms of savings. The paperback or a used copy is often cheaper than the electronic version. Of course, a lot of people find the electronic version to be worth its relatively high price, but ebooks aren't about cost savings to the consumer.
The big difference is price fixing, or agency pricing, as they call it. Amazon can set the prices on physical books, so they are frequently sold for half the publisher's list price. The publishers set the prices on ebooks, so they can enforce their high prices.
I usually buy the hard copy. If I don't like it enough to reread it, I resell it on half.com. Otherwise, I spend the 10 or 15 minutes it takes to scan it with a sheet feeder. Then I recycle the original.
The big difference is price fixing, or agency pricing, as they call it. Amazon can set the prices on physical books, so they are frequently sold for half the publisher's list price. The publishers set the prices on ebooks, so they can enforce their high prices.
I usually buy the hard copy. If I don't like it enough to reread it, I resell it on half.com. Otherwise, I spend the 10 or 15 minutes it takes to scan it with a sheet feeder. Then I recycle the original.
